Luxury Homes Not Being Sold In Portland

Homes worth more than $400,000 are not moving in Portland, in fact, 87% of homes sold in November in Portland were for less than $400,000. And even more evidence that the first time home buyers tax credit worked miracles for the market: 44% of home sales were for homes between $150,000 and $250,000. I expect these percentages to only increase over the next few months, especially with the tax credit expiring at the end of April. There will be a huge fall in all sales from April through July, which will majorly suck for the market, and the economy in general.

Plumbing with PEX Pipes

My husband took an a monumental task this weekend- replacing all of the old galvanized pluming in our house with new PEX pipes. Luckily we have an unfinished basement, so all of the pluming was visible, and we only replaced the pipes up to the point where they headed up into the walls. Still, it took 2 days, with my father-in-law's assistance, and my trying to be helpful! This project was great to do because it was relatively cheap, and the supplies are available at plumbing and hardware stores. PEX is also perfect for the amateur plumber and weekend do-it-yourselfer. Learn more at Lowes.com and at Northwest Renovation

Re-plumbing the whole house has also added value, for us now, and in a future sale, because we actually have water pressure now! At the same time we added in a new high efficiency, tank-less, gas water heater. The model we picked qualifies for a tax credit, and is powerful enough to supply water to several appliances at the same time.

The important thing, I think, about this project is that we will be able to enjoy the improvements immediately. Investing in your home isn't just about adding value for resale, but improving the quality of life you have in the home.

Be Glad If You Don't Own a Home in Bend

Bend has had the biggest decline in home values between Q2 and Q3 of 2009, in the whole country! While that market has been having major issues for a long time, this large of a decrease- 5.6% according to IHS Global Insight's report "House Prices in America"- is really bad news. Eventually the market will pick back up in Central Oregon's largest city, but it may take a long time, especially since the real estate market has not yet hit bottom.

Analysis of RMLS Monthly Report

The Regional Multiple Listing Service (RMLS) reported that the Portland region’s median home price ticked down to $239,000 in November, reaching its lowest level since June 2005. That's a 20.9% drop from the August 2007 peak of $302,000. While that's not good news, there were some positive aspects of the report. Sales were up a record 72% in November compared to a year ago. Sales only could come up from 2008 though, but any good news should be celebrated!

Median Prices for Portland Oregon Homes for November 2009

Median Sales Prices for Portland Or areas, for November 2009.
North Portland: October- $237,000 November- $245,000
NE Portland: October- $262,000 November- $249,700
SE Portland: October- $206,500 November- $202,500
West Portland: October-$333,700 November- $299,000
Beaverton/Aloha: October- $219,600 November- $220,000
Tigard/Tualatin/Sherwood/Wilsonville: October- $275,000 November- $275,000
Lake Oswego/West Linn: October- $381,500 November- $357,500
Milwaukie/Gladstone/Boring/Clackamas/Estacada: October- $253,800 November- $258,000

Is Mortgage Modification Failing?

Yes! And No! It seems to be equal parts success/stagnation and failure. There are currently 697,026 in trial modifications, up from 650,994 a month ago. This seems like a lot, but of the 4 million plus people in trouble, it's a small fraction that is growing slowly. Also, these are only trial modifications, meaning that if people don't make the payments on time, or their situation changes, they can get kicked out of the program and back into their old payment plan. That is exactly what has happened to 30,650 mortgage holders. Compare that to the almost equal number-31,382- that have been promoted from trail to permanent modifications. Not that many more successes than failures, and a whole hell of a lot of stagnation.
Read more details here.

RealtyTrac has Numbers on Oregon Foreclosures

The foreclosure website www.RealtyTrac.com has released its summary of Oregon foreclosures. They are down for the 4th month in a row, from a high in July, and they are down from this time last year. No one thinks we've seen the worst of the foreclosures yet, and I expect to have 2010 really be the year of foreclosures. People have been holding onto home through unemployment assistance and family help, but as that runs out and before job growth is created, there will be another onslaught of foreclosures. That will lead to more bank owned properties for sale, which are always cheaper than those owned by a person, so average prices will continue to creep down in the next year.

Flipping is Out, Nesting is In!

And not just because it seems like everyone around you is settling down, there are actual numbers to back it up. CNNMoney.com
has a new article out which reports that people are remodeling their current homes, as opposed to moving when they need more space or a different lay out. While that doesn't mean that flipping is a thing of the past, it does show that people are no longer constantly looking for the next bigger better house. They are staying where they are because they like the neighborhood, schools, or life they have built there. The slow real estate market for sellers can't be discouraging that choice either. Flipping has had a bad rap, and it isn't a very wise career move right now, but home buyers don't have to rule out buying a fixer, putting sweat equity into it, and making a profit in two or three years. Just don't count on throwing a granite counter into a fixer and making a bundle in a month.

Sales Will Slow from Now Through the Winter

Sales are traditionally slower from Thanksgiving though February, and this year will probably not be any different. The media, government, and Realtors are all hopeful that the $8000 tax credit for first time buyers and the $6500 credit for move up buyers will encourage people to keep on the hunt during the slow season. I think that there may be a small increase from last years purchases, but it's just not fun to go look at houses and condos in the winter! Not only is everybody busy with holiday stuff, it's cold and dark in the evenings, when most people are looking at homes. If you are on the market for a new place, it can be great to persevere through the winter because there is less competition from other buyers, and sellers are usually thrilled to have anybody interested at that time. While the stats have seemed positive for the last few months, look out for the media to start decrying a second bottom for the real estate market!

FHA Considering Making Loans Tougher to Get

A bill is already in Congress, the FHA Taxpayer Protection Act, that would raise the FHA down payment from 3.5% to 5% of the purchase price. Now there are hearings to see if the Federal Housing Administration needs to make it more difficult to get a mortgage. Right now, nationally, 30% of homes are purchase with FHA loans, and it is a very important program for minority and first time buyers. In Portland so many of the homes bought in the last year or so have been with FHA financing, it was surprising to run into a deal that didn't have it. Many Representatives and Senators do not know how important FHA loans are, not just to the real estate market, but to people that would like to buy a home. The regulations are already very restrictive on the health and safety of a property, so as to protect the buyer, to tighten it up even more would prevent so many people from getting into their own home.

Third Quarter Single Family Housing Report for Portland Metro

The greater Portland Metro area, including Vancouver Wa, has had a huge reduction in months of inventory- down to 4.9 months in September of this year. The outlying counties have not fared as well as Multnomah, but all are doing better than 2008. This report released yesterday from Norris, Beggs and Simpson summarizes the price trends as follows:
"New and existing home prices have been falling systematically since the peak price period of the housing bubble in the Summer
of 2007 when median prices in metro area hit an all time high of $302,000. Across all new and existing homes, median
prices are currently 18% off peak prices during the height of the bubble. The correction has been robust, averaging an annual
price depression of 7% over the past eight quarters.
Based on the historic sales trend observed between 1994 and 2002, current
median prices are roughly 6% above their forecasted level. Price declines appear
to be slowing in pace, and the market is not far off its price equilibrium. However,
housing markets tend to “overcorrect”, and we would anticipate prices to fall
slightly below trend in the short-term."


Click here for the full report from Norris, Beggs & Simpson